The goal of this proposal is to reveal signalling molecules and responding transcription factors that specify the hepatocyte from pluripotent endoderm in the mammalian embryo. Cells from the endoderm give rise to the liver, lung, pancreas, and intestine, yet it is unknown how the different genetic programs are initiated. While many studies have focused on how cells terminally differentiate, few have revealed how initial cell type choices are made. The tools are now in hand to address this problem for liver development, considering the following recent advances: a) our ability to induce the hepatic gene program in pluripotent endoderm and endoderm-derived cell lines in vitro; b) our discovery of signalling pathways which activate liver genes such as serum albumin at the earliest stages of hepatocyte differentiation; c) our discovery of transcription factors bound to the albumin gene prior to activation in endodermal precursor cells, and of additional transcription factors which bind the albumin gene upon hepatic specification in vivo. I propose to extend these advances with the following specific aims: 1. To determine which endodermal transcription factors respond to cell signals for hepatogenesis. 2. To define the cell signalling molecules which initiate liver gene expression and hepatic outgrowth from the endoderm. 3. To discover the transcription factors and cell signals sufficient to convert authentic precursors or heterologous cells to a hepatic fate. Our experimental system uniquely allows for the assessment of signalling molecules and responsive transcription factors that specify a mammalian cell type. The principles revealed by this proposal should be fundamental to the control of many other cell types and for understanding the proper growth and development of humans.